Category Archives: Commodities

Global Sugar Prices Look Weak And Likely To Fall Further

The global sugar prices have fallen off a cliff literally in the last few weeks and if you see the five-year chart for sugar prices they have been in a band between US $300 and $400 for much of the time in last five years.

In 2006 the prices did go as high as US $500 but they came back by the end of the year and the prices were in a range throughout the duration of 2007, 2008 and early 2009, and then the tremendous price rally happened in sugar prices where prices went as high as US $720-725 which was almost double the starting price in the year in 2009.

So that was a major rally in sugar that we saw and what we have seen within the first three months of 2010, from January to end of March, is a severe correction in the prices.

Prices are now back below US $500.00 at around US $480-490.00 and based on the chart it appears that the correction is not complete yet and that we could see the sugar prices go even below US $400.00 looking at the five-year charts and also the three-year and one-year charts.

So in that sense we think that it is better to be very cautious in the sugar stocks and sugar futures currently and the position would either be a short position still, or best would be to remain in the cash and not take any call till a stable pattern appears which could take another few weeks from now and once the price stabilizes at a certain level then that is the price at which we should enter the sugar futures or sugar stocks.

At this point looking at the chart it doesn’t give any confidence that the prices are stabilizing. The selloff has been very intense looking at the chart and the volumes have been very high in the selloff and therefore we think that right price probably to enter the sugar stocks and sugar futures for a buying or a call will be around US $400 which is still a good 20% down from where we are currently.

Iron Ore Prices Set To Double in 2010-2011

According to media reports, major iron ore exporters, including BHP Billiton and Rio Tinto, have reached a preliminary agreement to move away from annual contract pricing to quarterly arrangements.

The short term iron ire pricing contracts would be linked to the iron ore spot price, which would see iron ore prices more than double from the present $US 60 per ton top $US 130 per ton or more.

The Financial Times London reported unknown company executives as confirming the move away from annual pricing agreements. If the new system evolves, it will in fact mirror the quarterly pricing arrangement BHP won earlier this month for coking coal with customers in Japan, Europe and Korea. That saw BHP Billiton win price rises of 55% for hard coking coal, the best quality coal there is for the steel industry.

The FT said in its report that “The miners, including Vale of Brazil and UK-based BHP Billiton and Rio Tinto and steelmakers such as Nippon Steel, JFE, Sumitomo Metals and Kobe still need to resolve significant obstacles to reach a final agreement”. Continue reading

Resurgere Mines & Minerals – Iron Ore Supplier From India

Resurgere Mines & Minerals India Limited is an India-based company engaged in the mining and trading of iron ore and bauxite. The Company’s main business is mining and processing of iron ore products of various qualities, such as lump ore and size ore, and is a manufacturer of calibrated lump ore (CLO) and iron ore fines. Continue reading